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When it comes to property, there are many terms and abbreviations to know and understand.

Here is a list comprising the most common terms and abbreviations to help you in your future property transactions:

Body Corporate:
Is responsible for the administration and maintenance of all areas shared by owners in a block of apartments or multi-dwelling complex.

Capital Gain:
The amount by which your property has increased in value compared to the amount you purchased it for.

Caveat:
A record stated on the Certificate of Title advising that an interest in the property is claimed by a third party.

Certificate of Title:
A legal document which details ownership and property particulars such as the lot number, plan/diagram/strata plan number, volume and folio and encumbrances.¬† A Volume and Folio number is given to each Certificate of Title.

Consideration:
The price paid by a buyer for the purchase of a property.

Covenant :
Registered on the Certificate of Title restricting the titleholder to certain effects such as building above a certain height.

Easement:
Registered on the Certificate of Title to access utilities such as sewer lines.

Encumbrance:
A charge that affects the use of a property such as a Caveat, Easement or Restrictive Covenant.¬† It is registered on the Certificate of Title.

Final Inspection:An opportunity for the buyer to inspect the property they are purchasing just before settlement to ensure everything is in working order.¬† The property must be in the same state and condition as to when the offer was accepted.

Joint Tenants:
Each owner has equal shares and rights in the property.¬† Upon the death of one joint owner and if a right of survivorship exists, the share of the interest of the deceased automatically goes to the surviving owner(s).

Negatively Geared:
Income from a property is less than outgoings such as council and water rates, insurance, property management fees etc.¬† This loss can offset any income thus lowering the tax liability (taxable income is reduced).

Off the Plan:
The purchase of a property before it is built and can also be before the Certificates of Title are issued.¬† (eg. Apartments, land in new estates).

Offer and Acceptance (O&A):
Form used when an offer is made to purchase a property.¬† When the acceptance of the offer has been communicated back to the buyer, it becomes a legally binding contract (‚ÄėContract of Sale/Purchase‚Äô).

Passed In:
When a property does not sell at auction as the highest bid does not meet the reserve price or no bid has been received at all.

Positively Geared:
Income for the property exceeds all expenses.¬† The income is then added onto taxable income.

Reserve Price:
The minimum amount a seller will accept for their property at an auction.

Settlement:
The day all legal documentation and funds are exchanged between banks and settlement agents.¬†¬† The buyer is then the new owner of the property.

Stamp Duty:The Government tax paid by a buyer when purchasing a property.¬† Stamp Duty is paid before settlement.

Tenants in common:
Entities purchasing a property in specified shares. ¬†Upon the death of one entity, the property does not automatically go to the remaining entities unless it is stated in the will.

Valuation:
A written report of the estimated value of a property prepared by a valuer.¬† A Valuation is different to an appraisal as an appraisal is given by a real estate agent.¬† The banks instruct valuation companies to estimate the value of a property before finance is given.¬† The banks do not obtain appraisals, only valuations.